China VLCC locks in pair on period deals

Parent China Merchants also warns of small loss following disposal of veteran bulkers.

China Merchants Energy Shipping has secured long-term charters for two VLCCs at the same time as shedding a series of older bulkers from its fleet.

China VLCC, a China Merchants and Sinotrans joint-venture, has fixed tankers to BP and China Petroleum on two to three year deals worth CNY 495m ($75m), it told investors today.

It said the income was equal to 20% of its 2014 revenue, however, the company now has a larger fleet and the market has improved significantly in the interim.

Data from Howe Robinson Partners placed VLCC rates at $101,624 per day on Tuesday, with eco vessels earning $108,032 per day.

In a separate statement, China Merchants said it had sold off six bulkers built between 1995 and 1997.

The company will record a CNY 13.89m loss on the deal, which is expected to be a demolition sale.